What Do NJ Gamblers Need To Know About DraftKings and FanDuel’s Taxes?

If you’re interested in daily fantasy sports at all, you’re bound to have heard of FanDuel and DraftKings. These two companies are absolutely legendary within the industry, and if they’re in the news, you can be assured that there will be an intriguing story to follow along with.

Recently, daily fantasy sports fans – and the gambling industry as a whole – were shocked by recent news surrounding these two iconic companies and the International Revenue Service. Taxes and state revenue are always big topics in the gambling world, so this story is absolutely worth catching up to speed with.

In our article today, we’re going to be taking a look at DraftKings and FanDuel in more depth. We’ll be examining how these daily fantasy sports giants have performed in 2020 as a whole, then diving into the recent news surrounding their taxes and entry fees. It’s an essential topic to discuss, from the perspective of a gambling fan. 

 

How Has 2020 Been For DraftKings and FanDuel?

To start off with, it’s important to pay attention to the two industry giants involved in this news story. Despite the turbulent nature of 2020, these two industry leaders have still managed to stay on top of their game. Both parties here have been consistently putting out great content and amazing news stories for their audience. 

One of the most notable ways that these daily fantasy sports companies have made an impact this year is with their intelligent partnerships and business alliances. For example, FanDuel partnered with IGT and SportsGrid recently, and DraftKings set up a fantastic new deal to remain an exclusive MLB partner for DFS betting. 

Both companies have managed to keep their stock at a relatively high level this year too, which has been impressive. In particular, DraftKings has managed to stay in the spotlight with investors. As we covered here, now could be a brilliant time to invest in this company.

There have been some amazing business ventures from both parties this year as well, like DraftKings online casinos. To put it plainly, these are two industry leaders who know exactly how to keep their audience entertained and how to keep their competition at bay. For a business to stay afloat in the mess of 2020, they have to be spectacular.

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Why Are These Companies In The News Right Now?

The main reason why major daily fantasy sports companies like FanDuel and DraftKings are in the news right now is that the International Revenue Service made moves to introduce new federal taxes. To be more specific, federal tax charges are being introduced on entry fees for companies in this niche sector. 

This development has come as a shock to many people within the industry, with plenty of people fearing that it could put smaller companies out of business – and negatively affect giants like DraftKings or FanDuel, too. Developments relating to legislation in this industry are always met with fierce debate.

One of the most interesting points that has come up surrounding this introduction of new entry fee federal taxes is that entry fees were originally not considered as part of a bet or wager- which is where federal taxes are usually applied. This fact can be found in the case of Humphrey vs. Viacom, from 2007.

Another fascinating point that has been brought up both on social media and on industry blogs is that this new piece of legislation could draw attention to gambling companies who have not been paying their taxes correctly. Now more than ever, the eyes of government officials will be on the sports betting world. 

In summary, this piece of news has been met with a wide variety of emotions and reactions in the gambling industry. Daily fantasy sports companies are having to move quickly in order to defend their business practices and procedures, and many organizations in the industry are already feeling the pressure.

 

What Does This Mean For NJ Daily Fantasy Sports Players?

If you’re a gambler based in New Jersey who loves to play daily fantasy sports, it’s imperative that you read up on this subject matter further. This development with taxes could have some serious implications for the way that you play, and it could result in you having to change who you spend your money with, too.

Moreover, it’s likely that entry fees for daily fantasy sports tournaments could go up as a result of this development. Giants like DraftKings and FanDuel may be able to mitigate the damages in a financial sense, but smaller, independent companies will certainly be feeling the strain with this development.

As a whole, it’s important that you gamble in an extra mindful and conscious manner, following this news story. While taxes and federal laws may not seem entirely relevant to the way that you play, it’s good to be knowledgeable about them anyway. This news story has the power to shake up the industry.

 

Summary

In summary, this story has been a fiercely hot topic as of late- and with good reason. There are many people in the industry who believe these developments could have strong repercussions for the scene as a whole, and many businesses who feel threatened by the news as well. This certainly won’t be the last that we hear of it. 

Regardless of whether you’re part of a daily fantasy sports company, a passionate player or a casual fan, this is a story that could have some serious ramifications for your gaming experiences as a whole. We’re going to be following this story with great interest as the year finishes up, as there are sure to be further developments.

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